The shares of Línea Directa have soared 23.07% this Thursday, although a few minutes after being released on the Stock Exchange they reached a 30% rise. The insurer’s titles have reached 1.7 euros, although in the end they closed at 1.622, compared to the 1.3175 in which it began trading.
The other side of the coin of the stock market session is Bankinter, the group that until now controlled the insurer in its entirety. The bank directed by María Dolores Dancausa has been the value that has fallen the most on the Ibex, with the loss of 23.32% of its value, which means that her titles have depreciated to 1.39 euros. The explanation is that the entity has distributed 82.6% of Línea Directa through the procedure known as listing, that is, one share of the insurer has been delivered to each Bankinter shareholder .
This operation is similar to the distribution of a dividend, which is deducted from the value of the company once delivered. Direct Line titles were worth 1.3175 and Bankinter has dropped 1.39 euros, which limits the real decrease to 0.07 cents, with which the bank falls back to its levels of last January.
77 million in one day for large shareholders
For the big shareholders this day has been perfect. The founder and first president of the insurer, Jaime Botín, who controls 19.15% of its capital, through the company Cartival, received a package of shares valued at 274 million euros. In one day, Botín has made a capital gain of 63 million. The Asturian Masaveu family, which received securities worth 62.7 million euros, for 4.37% of the capital, has earned 14.26 million. Bankinter controls 17.4%, which has also increased in value by 23%, but has a stated vocation for permanence. For the moment, it has been shown that this IPO has been very profitable for the firm’s large shareholders.
“Listing on the Stock Exchange will allow us to have greater autonomy in the strategy and also in setting our own dividend policy,” assured this Thursday the financial director of Línea Directa, Carlos Rodríguez Ugarte. Línea Directa jumps onto the floor with a return on equity (ROE) of 35%. “The highest in the sector in Europe,” Miguel Ángel Merino, CEO of the insurer, told EL PAÍS this weekend. The explanation for this huge figure, according to Merino, lies in a very sophisticated selection of risks using big data[big data analytics]. “This situation allows us to offer a price that is up to 30% more competitive than the market average to 3.2 million customers,” he added. Its turnover is almost 900 million euros; These numbers have been obtained organically, without resorting to purchases or mergers. Its market capitalization has reached 1,765.41 million euros.
Few believed in his success
After the traditional ringing of the bell, which took place this Thursday at the Palacio de la Bolsa in Madrid at 12 noon, Miguel Ángel Merino stated in his opening speech: “When Línea Directa broke into the Spanish insurance sector, there was a total skepticism towards the success of the project. Today, however, we are a benchmark for notoriety, growth, efficiency, service, innovation, profitability and solvency. The most commendable thing is that the company has made a decisive contribution to improving and developing insurance in this country, making it more dynamic, more competitive and more modern. In the insurance sector there is a before and after the launch of Línea Directa Aseguradora on the market”.
The director assured that they are beginning a new path “with enthusiasm and with the aim of continuing to generate value and wealth, not only for our shareholders, but for society as a whole”.
Nuria Álvarez, an analyst at Renta 4, considers that the explanation for the revaluation of Línea Directa is that it had generated a lot of interest among investors because it has an interesting historical background: “It has grown more than the average for the sector and it is a value that will generate profits recurring, with a commitment to allocate more than 70% of the results to dividends”. In her opinion, it is a type of stable value, “which is not abundant in the market and very attractive for certain investors who do not want frights”.